In re Crash of Aircraft N93PC on July 7, 2013, at Soldotna, Alaska

WO IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
In re Crash of Aircraft N93PC ) No. 3:15-cv-0112-HRH
) [Consolidated with
on July 7, 2013, at Soldotna, Alaska ) No. 3:15-cv-0113-HRH and
_______________________________________) No. 3:15-cv-0115-HRH]
O R D E R
Honeywell’s Motion in Limine No. 22
Honeywell International moves to exclude Donald Frankenfeld’s opinions on the
economic loss sustained by the estates of Christopher and Stacey McManus and Milton and
Kimberley Antonakos.1 This motion is opposed.2 Oral argument was requested but is not
deemed necessary.
Background
On July 7, 2013, a deHavilland DHC-3 “Otter” airplane operated by Rediske Air, Inc.
and piloted by Walter Rediske crashed shortly after take off from the Soldotna Airport.
Rediske and all of the passengers on board were killed in the crash. Plaintiffs, which are the
estates of the passengers and Rediske, assert wrongful death, negligence, strict product
liability, and breach of warranty claims against Honeywell.
1Docket No. 413.
2Docket No. 453.
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Four of the passengers, Christopher and Stacey McManus and Milton and Kimberley
Antonakos, were adults. None of the four were survived by statutory beneficiaries, so their
losses are limited to pecuniary loss. AS 09.55.580. The Alaska Supreme Court has “defined
pecuniary loss as the probable value of the deceased’s estate had he not prematurely expired
less the actual value of the estate at death.” Portwood v. Copper Valley Elec. Ass’n, Inc.,
785 P.2d 541, 542 (Alaska 1990) (citation omitted). The passenger plaintiffs retained
Donald Frankenfeld as their economist. Frankenfeld has offered opinions as to the probable
value of the estate of each of the four adult decedents.3
Pursuant to Rule 702, Federal Rules of Evidence, Honeywell now moves to exclude
Frankenfeld’s opinions as to the value of the estates of the four adult decedents.
Discussion
Rule 702 of the Federal Rules of Evidence provides that expert
opinion evidence is admissible if: (1) the witness is sufficiently
qualified as an expert by knowledge, skill, experience, training,
or education; (2) the scientific, technical, or other specialized
knowledge will help the trier of fact to understand the evidence
or to determine a fact in issue; (3) the testimony is based on
sufficient facts or data; (4) the testimony is the product of
reliable principles and methods; and (5) the expert has reliably
applied the relevant principles and methods to the facts of the
case.
City of Pomona v. SQM North America Corp., 750 F.3d 1036, 1043 (9th Cir. 2014).
“Before admitting expert testimony into evidence, the district court must perform a
3Exhibits A, B, C, and D, Honeywell’s Motion in Limine No. 22 [etc.], Docket No.
413.
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‘gatekeeping role’ of ensuring that the testimony is both ‘relevant’ and ‘reliable’ under Rule
702.” United States v. Ruvalcaba-Garcia, 923 F.3d 1183, 1188 (9th Cir. 2019) (quoting
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 597 (1993)).
“‘[R]eliability’ . . . requires that the expert’s testimony have ‘a reliable basis in the
knowledge and experience of the relevant discipline.’” Id. at 1188-89 (quoting Estate of
Barabin v. AstenJohnson, Inc., 704 F.3d 457, 463 (9th Cir. 2014)). “The district court must
assess whether ‘the reasoning or methodology underlying the testimony is scientifically
valid’ and ‘properly can be applied to the facts in issue[.]’” Id. at 1189 (quoting Daubert,
509 U.S. at 592–93). “‘The district court is not tasked with deciding whether the expert is
right or wrong, just whether his testimony has substance such that it would be helpful to a
jury.’” City of Pomona, 750 F.3d at 1044 (quoting Alaska Rent-A-Car, Inc. v. Avis Budget
Group, Inc., 738 F.3d 960, 969-70 (9th Cir. 2013)). “The court must assess the expert’s
reasoning or methodology, using as appropriate[,] criteria such as testability, publication in
peer-reviewed literature, known or potential error rate, and general acceptance.” Id. “But
these factors are meant to be helpful, not definitive, and the trial court has discretion to
decide how to test an expert’s reliability as well as whether the testimony is reliable, based
on the particular circumstances of the particular case.” Id. (citation omitted).
Honeywell first argues that Frankenfeld’s opinions as to the value of the four adult
decedents’ estates are not reliable because he used the September 11th Victim Compensation
Fund (the “Fund”) to determine the amount each decedent would have spent during his or
her remaining work life. Honeywell argues that the Fund was not created for use in civil
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litigation and that the Fund’s model is not appropriate for a case such as this. The Fund was
intended to “provide compensation as an alternative to the tort system” and “was not
intended to replicate tort damage awards in wrongful death actions.” Colaio v. Feinberg, 262
F. Supp. 2d 273, 292 (S.D.N.Y. 2003). With respect to the consumption aspect of economic
loss, the Fund developed a table of rates based on 1999 Bureau of Labor Statistics wage data
and consumer spending habits.4 The consumption “methodology adopt[ed] a number of
assumptions implemented to facilitate analysis on a large scale” and “these assumptions
[were] designed to benefit the claimants and [were] far more favorable than the standard
assumptions typically applied in litigation.”5 Thus, Honeywell argues that Frankenfeld’s use
of the Fund’s consumption rate tables makes his opinions as to the four adult decedents
unreliable because the Fund’s consumption rate tables were not developed for tort litigation
such as this and were intended to favor claimants.
A personal consumption deduction is an appropriate component of the formulation
of the value of a decedent’s estate. Frankenfeld’s use of the Fund does not render his
opinions as to the value of the estates of the four adult decedents unreliable. Rather,
questions about his use of the Fund “go more toward weight than admissibility.” Knaack v.
Knight Transportation, Inc., Case No. 3:17-cv-00172-LRH-WGC, 2019 WL 1982523, at *2
(D. Nev. May 3, 2019).
4Exhibit F at 7, Honeywell’s Motion in Limine No. 22 [etc.], Docket No. 413.
5Id. at 8.
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However, having elected to use the Fund, Frankenfeld cannot ignore the undisputed
facts of this case in reaching his opinions as to each decedent’s consumption discount. The
Fund’s consumption rates table was calculated, and to be applied, based on the number of
dependents who survived the decedent.6 The Fund used “different consumption rates for
single decedents without dependents than for married decedents or single decedents with
dependents.” Colaio, 262 F. Supp. 2d at 298. The single with no dependents category was
assigned the highest consumption rate.7
For the four adult decedents, although they died without surviving spouses or any
dependents, Frankenfeld applied the “married, no children” consumption rate as opposed to
the “single, no children” consumption rate. At his deposition, Frankenfeld testified that he
selected the “married, no children” rate because he “believe[d it] is the appropriate one. But
there are also different numbers on the schedule, which a finder of fact may believe are
preferable to the number I used.”8 He further testified that the “married, no children” rate
“means no children in the house . . . which is not exactly right, but it would describe” the
four adult decedents’ “circumstances through most of the balance” of their lives.9 But that
statement is not accurate because none of the four adult decedents were survived by their
6Id. at 7.
7Exhibit E at 1, Honeywell’s Motion in Limine No. 22 [etc.], Docket No. 413.
8Deposition of Donald L. Frankenfeld at 61:7-10, Exhibit G, Honeywell’s Motion in
Limine No. 22 [etc.], Docket No. 413.
9Id. at 86:13-19.
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spouse. Frankenfeld’s use of the “married, no children” consumption rate “‘is connected to
existing data only by the ipse dixit of the expert.’” Houserman v. Comtech Telecommunica-
tions Corp., --- F. Supp. 3d ---, 2020 WL 7695695, at *1 (W.D. Wash. 2020) (quoting Gen.
Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997)).
However, that does not mean that Frankenfeld’s opinions as to the value of the estates
of the four adult decedents must be excluded. After reaching a “core conclusion” about each
decedent’s earning capacity and personal consumption rate, Frankenfeld “then test[ed his]
model 25 times against alternative assumptions, so that if the fact finder concludes that
different earnings or consumption figures are appropriate, they can apply them to see how
losses are affected.”10 These alternatives are set out in a chart (Chart III) for each adult
decedent. Thus, Frankenfeld can easily adjust his opinions to use the appropriate “single,
no children” consumption rate for purposes of his trial testimony.
Honeywell next argues that Frankenfeld’s opinions as to the value of the four adult
decedents’ estates are unreliable because he improperly included awards for household
services. Honeywell argues that it was improper to include awards for household services
because there is no provision within the statutory recovery for pecuniary loss for household
services. Honeywell contends that “[t]his makes sense because when the decedent dies
without statutory beneficiaries or other dependents, as in this case, there are no surviving
beneficiaries who have lost the benefit of the household services, and therefore, there is no
10Exhibit A at 4, Honeywell’s Motion in Limine No. 22 [etc.], Docket No. 413.
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corresponding recovery.”11 Honeywell points out that Frankenfeld testified that “[i]f there
is no one deprived of household services, it would not be appropriate to include household
services as an element of loss.”12 Frankenfeld further testified that “[i]f the kids aren’t
around to receive those household services, then the loss becomes something of an
abstraction.”13
Awards for household services were not properly included in Frankenfeld’s opinions
as to the four adult decedents given that the adult decedents had no surviving beneficiaries.
But, again, that does not mean that Frankenfeld’s opinions as to the four adult decedents
must be excluded. Rather, Frankenfeld’s inclusion of such services must be adjusted out for
purposes of his trial testimony.
Honeywell next argues that Frankenfeld’s opinions as to the value of the four adult
decedents’ estates are unreliable because he improperly included an allowance for fringe
benefits, including health care benefits. Honeywell argues that there is no provision in
Alaska’s wrongful death statute for a beneficiary’s loss of a decedent’s benefits where
recovery is limited to pecuniary loss. Honeywell argues that Frankenfeld admitted as much
at his deposition. Frankenfeld was asked to
11Honeywell’s Motion in Limine No. 22 [etc.] at 9, Docket No. 413.
12Frankenfeld Deposition at 119:5-7, Exhibit G, Honeywell’s Motion in Limine No.
22 [etc.], Docket No. 413.
13Id. at 119:21-23.
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assume . . . no statutory beneficiaries, no dependents, so
someone who say maybe is a cousin who is receiving no
benefits is the personal representative and maintains the lawsuit.
A single person dies, no spouse, no children, a relative, first
degree of consanguinity, let’s assume, brings the lawsuit. I’m
just wondering in that circumstance, would you calculate as part
of the economic loss, whether you were for the defense or the
plaintiff, fringe benefits, healthcare benefits?[14]
Frankenfeld answered that “we’re being hypothetical, and I think . . . if the decedent, I’ll say
he, was the only beneficiary of those healthcare benefits, I don’t believe it would be
appropriately included as a loss.”15 Thus, Honeywell argues that Frankenfeld improperly
included fringe benefits for the four adult decedents. Honeywell also suggests that the fringe
benefits were improperly included because health care benefits and other fringe benefits do
not tend to have residual value; either one uses them or loses them. Honeywell argues that
means that such benefits would not be passed on to the estate and thus they should not be
included where, as here, recovery is limited to the loss to the estate.
Frankenfeld improperly included health care benefits in his fringe benefits
calculations, but that does not mean that his opinions as to the four adult decedents must be
excluded. Rather, Frankenfeld’s inclusion of health care benefits must be adjusted out for
purposes of his trial testimony. Whether there are other fringe benefits that have been
included by Frankenfeld, and whether any such other fringe benefits have a residual value
14Id. at 117:24-118:12.
15Id. at 118:13-17.
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for purposes of the four adult decedents’ estates, are proper subjects for cross-examination
at trial.
Finally, Honeywell argues that Frankenfeld’s opinions are not reliable because he
originally failed to reduce past economic losses for income taxes. Under Alaska law, such
losses must be reduced by the federal and state income taxes the decedent would have been
required to pay on his estimated past earnings. Beaulieu v. Elliott, 434 P.2d 665, 673
(Alaska 1967). Frankenfeld made no such reductions in his original report but in his rebuttal
report, he acknowledged that “income tax adjustments to my conclusions may be appropri-
ate.”16 Frankenfeld then made such adjustments and offered new opinions as to the four
adult decedents’ past earnings.17 Honeywell suggests that Frankenfeld may offer opinions
at trial that do not include these adjustments and also suggests that Frankenfeld may have
improperly applied the income tax adjustments.
Frankenfeld’s treatment of income tax is not a basis for excluding his opinions as to
the value of the four adult decedents’ estates. Frankenfeld has made the necessary income
tax adjustments and there is no reason to believe his testimony at trial will not include these
adjustments. And, there is nothing to suggest that Frankenfeld improperly applied the
income tax adjustment.
16Frankenfeld Rebuttal Report at 1, Exhibit H, Honeywell’s Motion in Limine No. 22
[etc.], Docket No. 413.
17Id.
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Conclusion
Honeywell’s motion in limine No. 22 is granted in part and denied in part.
Frankenfeld’s opinions as to the value of the four adult decedents’ estates are not excluded,
but Frankenfeld must, consistent with this order, make adjustments to his these opinions for
purposes of his trial testimony.
DATED at Anchorage, Alaska, this 30th day of June, 2021.
/s/ H. Russel Holland
United States District Judge
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